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WHAT IS PROBATE?
Dying without a Trust
Just what is probate, and why do people want to avoid it?
People will probably tell you that probate has something to do with death. They will further tell you that they hope to avoid both (probate and death). We may not be able to help you avoid death, but we can certainly help you avoid probate.
Probate is a time-consuming process that requires:
This process doesn’t really change when a person dies if there is no Last Will and Testament. The result will be that all of the probate steps listed above will simply occur; with the exception being that the deceased person’s property (after probate) will be distributed to his family according to state law.
People often feel having a Last Will and Testament is important for estate planning purposes. The sole purpose of a Last Will and Testament is for you to state your wishes about the distribution of your property after your death. Using only a Last Will and Testament will incur probate fees, which could be avoided by replacing your Last Will and Testament with a Living Trust. The Living Trust provides probate avoidance, if certain steps are followed, and greater flexibility during your lifetime.
THE HIGH COST OF DYING
Probate can be a long, expensive process that simply does not have to occur.
Death is a difficult time for everyone concerned, and the family should not have to be forced through the unnecessary agony of probate.
Probate will require a “personal representative” and an “attorney.” Sometimes the personal representative is referred to as the “executor.” In probate, both the personal representative and the attorney are entitled to substantial fees for their services.
The personal representative is responsible for making sure the Last Will and Testament is followed. The personal representative often hires an attorney to handle the necessary paperwork.
Personal representatives and attorneys are allowed to charge “reasonable fees” for their services. Typically, where an estate has a gross value of $400,000, attorney fees will run in the area of $12,000, but could go much higher. These fees are paid out before any proceeds are distributed to the decedent’s family.
Some additional fees beyond those paid to the attorney include court costs, appraisers’ fees, filing fees, etc.
Most people seem to agree that probate is something to be avoided and a Living Trust can accomplish that goal.
A REVOCABLE LIVING TRUST ELIMINATES PROBATE
A Living Trust can also be called by its common name, a “revocable living trust.”
It is called “revocable” because you can alter your estate plan anytime during your lifetime and even revoke the entire trust if you choose.
It is described as “living” because the Living Trust operates while you are still alive, and survives you at death, distributing your assets per your request, in contrast to a Last Will and Testament, which only comes into existence at your death.
It is a “trust” because it creates an entity into which assets can be placed for normal use during your lifetime and then be available for distribution to anyone you select after your death.
To avoid probate, a person or a married couple can place assets in “trust” while keeping full control over their property. The trust has actual ownership of the property although you are free to amend or revoke the trust throughout your life.
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